Gold Needs To Close Above $1294
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Yesterday’s close: Settled at 1285.2, up 3.8
Fundamentals: Gold held ground and finished in the green yesterday despite the Chinese Yuan losing 0.65%. Overnight strength in the Yuan has completely dissipated but Gold is holding near session highs after U.S CPI data came in lighter than expected. With risk-assets under pressure in the U.S but higher in the likes of China after state-run buying, this all should bring an interesting dynamic for the metal. One where the Yuan is currently not weaker than yesterday coupled with a more dovish Fed due to slow inflation should be helpful for Gold. We like the metal today and it is go-time for a technical breakout, discussed below. NY Fed President Williams speaks at 9:00 am CT.
Technicals: Each time Gold has tested major three-star resistance at 1291.3-1291.7, it has been batted down. Today, we have aligned this major three-star resistance level with the trend line on the June contract at 1295, the continuous trend line comes in closer to 1294. These are semantics, we need to see a close above here for a bullish breakout and a confirmation of a bottoming pattern. Such could bring a strong tailwind setting the metal on a path to 1308.5-1311 through the following session.
Resistance: 1291.3-1295***, 1301.5**, 1308.5-1311.6**, 1318.3**
Support: 1279.1-1280.8**, 1264-1267.9***, 1255.8-1258.5***